Monetary Policy Strategy
This book by a leading authority on monetary policy offers a unique view of the subject from the perspectives of both scholar and practitioner. Frederic Mishkin is not only an academic expert in the field but also has been a high-level policymaker. He is especially well positioned to discuss the changes in the conduct of monetary policy in recent years, in particular the turn to inflation targeting. Monetary Policy Strategy describes his work over the last ten years, offering published papers, new introductory material, and a summing up, "Everything You Wanted to Know about Monetary Policy Strategy, But Were Afraid to Ask," which reflects on what we have learned about monetary policy over the last thirty years.
Mishkin blends theory, empirical evidence, and extensive case studies of monetary policy in advanced and emerging market and transition economies. Throughout, his focus is on these key areas: the importance of price stability and a nominal anchor; fiscal and financial preconditions for achieving price stability; central bank independence as an additional precondition; central bank accountability; the rationale for inflation targeting; the optimal inflation target; central bank transparency and communication; and the role of asset prices in monetary policy.
About the Author
Frederic S. Mishkin is Alfred Lerner Professor of Banking and Financial Institutions at the Graduate School of Business, Columbia University, Research Associate at the National Bureau of Economic Research, a past Executive Vice President and Director of Research at the Federal Reserve Bank of New York and after finishing this book was appointed a member of the Board of Governors of the Federal Reserve System. He is the author of The Next Great Globalization: How Disadvantaged Nations Can Harness Their Financial Systems to Get Rich and other books.
"In Monetary Policy Strategy, Frederic Mishkin—a prominent policymaker and respected academic—presents the conclusions of his decade-plus research on monetary policy in both advanced and emerging market countries. The research is empirical, careful, and balanced, and it leads him to support a pragmatic and flexible form of inflation targeting as the best type of monetary policy for both the United States and many other countries. This is the book to read if you want to understand where monetary policy is heading, and why."
—Stanley Fischer, Governor, Bank of Israel
"Frederic Mishkin has been one of the principal contributors to advancing our understanding of monetary policy, at both the scientific and the practical level, for more than a quarter-century. These collected papers chart an intellectual trajectory that closely defines how core thinking in the field has evolved over this period. Going through them in order is a splendid tour of the field for anyone seeking either a review or an introduction. And having them collected in one volume, to consult as the need arises, is a boon for up-to-date specialists as well."
—Benjamin M. Friedman, William Joseph Maier Professor of Political Economy, Harvard University
"This collection of recent articles by Frederic Mishkin is one of the bestavailable introductions to current thinking about monetary policy.It distills an immense amount of practical wisdom, drawing upon a rarecombination of theoretical insight and close observation of central bankingaround the world, and takes the reader into the heart of currentcontroversies while remaining accessible to nonspecialists."
—Michael Woodford, John Bates Clark Professor of PoliticalEconomy, Columbia University
"No one is better equipped to offer insight on monetary policy strategy thanFrederic Mishkin, who draws on his experience from distinguished careers inboth academia and the Federal Reserve System. This collection of papers isessential reading for anyone wishing to become knowledgeable on thesubject."
—Mark Gertler, Henry and Lucy Moses Professor of Economics, New YorkUniversity
"The collection is enriched by excellent introductory and concludingchapters and provides a remarkably comprehensive, insightful, and pragmaticdiscussion of virtually every topic on monetary policy strategy that centralbankers regularly confront in practice and that students of central bankingshould appreciate learning more about. Personally, Monetary Policy Strategywas a really good read for a former central banker who has strong views onvirtually all the topics covered."
—Laurence H. Meyer, Vice Chairman of Macroeconomic Advisers